Blink and you miss it

AAII sentiment did a big u-turn this week showing bulls dropping to 30% and bears spiking to 39%.  Since the correction that began in early May started, bond yields have dropped notably back to YTD lows and we've seen fund flows go firmly negative. Put buying has exploded too even in the face of the strength these few days including today.  All this make fertile conditions for at least a ST bottom and I suspect we've probably seen the lows of this correction and we should be looking for long entry point here. I know what you're thinking....it would have been nice to know this a few days ago when the market was lower and I agree.  The problem is the sentiment data I track  is released weekly which means you may not be able to react to it at the ideal time.  Admittedly, I was hoping for the market to get a bit more oversold too, but alas, the market doesn't always give you what you want. In recent years it's been more common to see the market do V shaped recoveries which is frustrating for me. What this means is that you gotta risk catching falling knives if you hope to buy near the low points. If not and you wait for confirmation first, it can be hard to pull to trigger knowing you could have bought lower or you fear a retest of the lows which never ends up happening. Staggering entry points could be a way to overcome this....use say up to 50% of your intended position to buy during major weakness and the other 50% only when there's some sort of  confirmation. 

It's also important to not get too caught up in the ST wiggles of the market and think  more longer term because the ST is often very tricky to navigate through. and riding the bigger trend is where you can make big money. I found a really nice nugget of information suggesting that this market still has a long way to go before we get to the point of too much optimism. I'll share that in a later post.